Posted inHead To Head

HEAD-TO-HEAD: Fidelity vs UBS

FSA compares the Fidelity China Focus Fund and the UBS China Opportunity Fund.
by Francis Nikolai Acosta
Offshore China equities

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Pictured: Claire Liang, Morningstar

China equity has recently performed well after massive volatility in 2015 and 2016, according to Wing Chan, Hong Kong-based director for manager research at Morningstar, told FSA.

“You can go back 18 months, but in the last six months it has done very well.”

The MSCI China Index, which measures the performance of offshore China equities, was up 27.32% on a cumulative basis over a three-year period, according to FE data. Year-to-date, the index is up 37.30%.

However, Chan noted that a majority of Chinese equity managers have witnessed outflows rather than inflows from investors.

Some alarm bells are sounding on China’s economy. Recently, the IMF issued a warning about China “dangerous” debt. Additionally, China’s wealth management products, which are often developed to provide credit to Chinese companies, have gathered 3x the assets of the mainland’s total mutual fund industry, prompting tighter regulation.

“China is a market where not all investors have a bet, in spite of its performance,” Chan said.

Against this backdrop, Claire Liang, Shenzhen-based analyst for manager research at Morningstar China, compares two China equity products: the Fidelity China Focus Fund and the UBS China Opportunity Fund.

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